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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -0.55. The lowest was -3.03. And the median was -2.46.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:
|M||=||-4.84||+||0.92 * DSRI||+||0.528 * GMI||+||0.404 * AQI||+||0.892 * SGI||+||0.115 * DEPI|
|=||-4.84||+||0.92 * 0.9578||+||0.528 * 0.942||+||0.404 * 0.9824||+||0.892 * 1.0594||+||0.115 * 0.9289|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9647||+||4.679 * -0.0139||-||0.327 * 0.9434|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $2,544 Mil.|
Revenue was 4123.2 + 4270.9 + 3918.8 + 4492.8 = $16,806 Mil.
Gross Profit was 1883.3 + 1941.8 + 1822.5 + 2091.9 = $7,740 Mil.
Total Current Assets was $6,026 Mil.
Total Assets was $41,147 Mil.
Property, Plant and Equipment(Net PPE) was $2,392 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,692 Mil.
Selling, General & Admin. Expense(SGA) was $4,658 Mil.
Total Current Liabilities was $5,735 Mil.
Long-Term Debt was $10,278 Mil.
Net Income was 476.1 + 511.6 + 385.1 + 601.2 = $1,974 Mil.
Non Operating Income was -1.4 + 3 + -3.9 + 4.9 = $3 Mil.
Cash Flow from Operations was 743.9 + 764.9 + 80 + 953.7 = $2,543 Mil.
|Accounts Receivable was $2,507 Mil.
Revenue was 4171.4 + 4321.9 + 3903.5 + 3466.9 = $15,864 Mil.
Gross Profit was 1933.6 + 1846.5 + 1620 + 1481.7 = $6,882 Mil.
Total Current Assets was $5,720 Mil.
Total Assets was $42,691 Mil.
Property, Plant and Equipment(Net PPE) was $2,406 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,505 Mil.
Selling, General & Admin. Expense(SGA) was $4,558 Mil.
Total Current Liabilities was $6,222 Mil.
Long-Term Debt was $11,389 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(2543.9 / 16805.7)||/||(2507.1 / 15863.7)|
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1941.8 / 15863.7)||/||(1883.3 / 16805.7)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (6025.9 + 2392.2) / 41147.1)||/||(1 - (5719.9 + 2406.1) / 42690.8)|
4. SGI = Sales Growth Index
Ratio of sales in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
|DEPI||=||(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))||/||(Depreciation_t / (Depreciaton_t + PPE_t))|
|=||(1505.4 / (1505.4 + 2406.1))||/||(1692.4 / (1692.4 + 2392.2))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
|SGAI||=||(SGA_t / Sales_t)||/||(SGA_t-1 /Sales_t-1)|
|=||(4658.3 / 16805.7)||/||(4558.2 / 15863.7)|
7. LVGI = Leverage Index
The ratio of total debt to total assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((10277.9 + 5735.1) / 41147.1)||/||((11388.6 + 6222.1) / 42690.8)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(1974 - 2.6||-||2542.5)||/||41147.1|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
Thermo Fisher Scientific Inc has a M-score of -2.55 suggests that the company will not be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
Thermo Fisher Scientific Inc Annual Data
Thermo Fisher Scientific Inc Quarterly Data